ILLINOIS BUDGET PROPOSAL

ILLINOIS BUDGET PROPOSAL WITH MULTI-BILLION TAX HIKES, CUTS SENT TO TOP OFFICIALS

With just more than two weeks remaining in the legislative session, a group of rank-and-file legislators Thursday sent a budget proposal to Gov. Bruce Rauner and the four legislative leaders that highlights ways the state can produce a balanced budget through a multi-billion-dollar mix of tax increases and spending cuts.

The plan — the first to surface in what is a historic 11-month budget stalemate — calls for a combination of $5.4 billion in tax hikes along with $2.5 billion in spending cuts.

Under the proposal, the Chicago Tribune reported, the state would bring in $5.4 billion in new revenue mostly through tax hikes, including raising the individual income tax rate to as high as 4.85 percent from the current 3.75 percent, expanding the sales tax base, likely to services and items not yet taxed, and eliminating some corporate tax breaks.

The Chicago Sun-Times reported the income tax rate proposed was between 4.5 and 4.75 percent.

The $2.5 billion in spending cuts would be achieved by ending pension-spiking costs, requiring schools and colleges to pick up pension costs for employees with annual salaries of more than $180,000, reducing health care spending for the poor and changing how the state purchases goods and services, the Tribune said. Another $450 million the state borrowed from special funds last year no longer would have to be repaid as part of the plan.

Illinois House Speaker Michael Madigan’s spokesman, Steve Brown, said he hasn’t seen what was submitted to the governor and the legislative leaders, but said calling it a proposal was “getting ahead of yourself.” Brown said there most likely was a list delivered of new revenue and spending cut items that came out of private budget negotiations between a bipartisan group of rank-and-file lawmakers over the past month.

Madigan was asked by a reporter Thursday about his goals for the remaining two weeks of the spring legislative session and he said, “My goal for the remainder of the session is to continue to do budget-making without references to changes in collective bargaining, workers’ compensation and prevailing wage. And my further goal is not to agree with the governor to use the government to bring down the wages and the standard of living of middle class families, to send injured workers to the emergency room or to welfare, or to continue to hurt the vulnerable in our society. Those are my goals.”

The bipartisan group of lawmakers, some of whom serve on the state’s appropriations committees have been meeting privately for several weeks. State Journal-Register Statehouse Bureau Chief Doug Finke reports:

A member of the negotiating team, who spoke on condition of anonymity, said the plan would also borrow $5 billion to immediately pay down the state’s backlog of bills. The borrowing would be repaid over five years.

Illinois House Republican Leader Jim Durkin, R-Western Springs, told Finke he wouldn’t use the term “framework” to describe the proposal because it does not include any of the pro-business or labor union reforms on Rauner’s “Turnaround Agenda,” some of which the governor says must be passed by the General Assembly before he will agree to any tax hikes.

But inside a Capitol stuck in the rut of a record-breaking 11-month impasse, many in the state’s political class eagerly welcome any emerging wrinkle, especially given that the budget framework talks were led by Rauner budget director Tim Nuding.

“There was no agreement in the sense that everybody said, ‘Yeah, I can sign onto things as is,’” said Rep. Barbara Flynn Currie, a Chicago Democrat and top deputy to Madigan. “So there’s lots of internal discussions still to be had, but the idea is here’s a framework, and it was enough of a framework for Nuding to feel comfortable taking it to the governor.”

More from the Tribune:

But Rauner remained focused on distancing himself from the talks, and indicated that the two sides were still far from a final deal.

“I don’t want to get in front of any specific idea yet, or comment, because it’s a little dangerous to take one proposal out of context. This is going to be a grand, fairly fulsome compromise,” Rauner said. “And virtually, we’ll know we’re at a good place where everybody involved is not particularly happy with the outcome but they are happy with certain elements of the outcome. Because that’s the political process, that’s the definition of a grand bargain.”

Earlier Thursday, the House in a 111-0-3 vote approved a $700 million stopgap appropriations bill to fund social service agencies that have been without state funding since the budget standoff began July 1. The legislation authorizes the state to take about $450 million from a human services fund and $250 million from special funds to be spent on things like foreclosure prevention and affordable housing. Durkin, who was one of three lawmakers to vote present, said the bill lacked funding for other critical state services including prisons. The Illinois Republican Party also sent a release out highlighting the lack of prison funding, indicating that is sure to be a campaign focus for the November election.

Of the spending bill to help social services, Illinois Senate President John Cullerton, in a statement released Thursday afternoon, said it was a step in the right direction, but that more needs to be done.

“This gets needed funding to programs that care for our elderly, disabled and others victimized by Governor Rauner’s budget vetoes. Senate Democrats have time and again tried to give the governor the ability to fund these vital services. Hopefully, he will sign this bipartisan plan.

Make no mistake, more needs to be done. This is, at best, a step in the right direction. It is by no means a victory lap for anyone.

I hope the governor will do the right thing and sign this legislation as soon as it hits his desk.”

On the House floor, Durkin said he would have supported the measure if it had included funding for the Illinois Department of Corrections, among other agencies. Durkin said without funding for prisons, prisoners could run out of food as soon as this summer.

The measure also cleared the Illinois Senate on Thursday and now heads to Gov. Bruce Rauner’s desk. The funds would be distributed immediately, if approved by Rauner, who has vetoed some other spending bills with no revenue sources.

Rauner’s budget office sent out a memo before the vote on Thursday, warning that the bill would prohibit some agencies from funding certain programs. It cited the Dept. of Aging won’t be able to pay phone line charges and communication equipment to pay for a Senior Help Line; and an HIV program still won’t have funding for medical supplies, lab testing or to pay insurance premiums for clients.

Here’s a breakdown of where the $700 million sent for Rauner’s consideration would be allocated: